Israeli soldier hurls a sound grenade at Palestinians during clashes in the West Bank City of Ramallah, January 9, 2018. Alaa Badarneh / EPA

Israel will approve construction of hundreds of new settlement homes in the occupied West Bank, Israeli defence minister Avigdor Lieberman said on Tuesday.

Settlements are one of the most heated issues in efforts to restart Israeli-Palestinian peace talks, frozen since 2014.

Palestinians want the West Bank for a future state, along with East Jerusalem and the Gaza Strip. Most countries consider the Israeli settlements built in the territory, which Israel captured in the 1967 Middle East war, as illegal.

Israel disputes its settlements are illegal and says their future should be determined in peace talks with the Palestinians.

Israeli authorities were due to approve on Wednesday the construction of 1,285 housing units to be built in 2018 and advance planning for 2,500 others in about 20 different settlements, Mr Lieberman said in a statement.

There was no immediate comment from the Palestinian officials. The Palestinians say Israeli settlements in the West Bank, a key issue in peace talks, deny them a viable contiguous state.

US-brokered peace talks between Israel and the Palestinians collapsed in 2014 and a bid by president Donald Trump's administration to restart them have shown little sign of progress.

Asked about the construction plans, a US state department official said there had been no change in policy on settlements and the Israeli government had made clear that going forward "its intent is to adopt a policy regarding settlement activity that takes the president's concerns into consideration".

"The United States welcomes this. As the president has said repeatedly, the administration is firmly committed to pursuing a comprehensive peace between Israelis and Palestinians," the US official said on condition of anonymity.

Mr Trump's decision on Jerusalem and announcement in December that the United States would start the process of moving its embassy from Tel Aviv enraged the Palestinians who said the US can no longer broker peace with Israel.